Denomination (currency)

Denomination (currency)
Banknotes of 5000 denomination in different currencies including Franc, Yen, Lire, and Dollar

Denomination is a proper description of a currency amount, usually for coins or banknotes. Denominations may also be used with other means of payment like gift cards. See also Redenomination.

Contents

Subunit and super unit

In a currency, there is usually a main unit (base), and a subunit that is a fraction of the main unit. In some countries, there are multiple levels of subunits. In the former Ottoman Empire, 1 lira = 100 kuruş = 4000 para = 12000 akçe. Today, only a few places have more than one subunit, notably Chinese speaking regions: the mainland China (renminbi), the Hong Kong (dollar), and Republic of China's (New Taiwan dollar). In addition, the Jordanian dinar is divided into 10 dirham, 100 qirsh/piastres, or 1000 fils. Many countries where Western European languages are spoken currently have their main units divided into 100 subunits. Some currencies that previously had subunits no longer do, because inflation has rendered the subunit useless. A prominent example is the Japanese yen, which was formerly divided into 100 sen or 1000 rin. Both subunits were demonetized at the end of 1953.[1]

Occasionally, a super unit is used as a multiple of the main unit. Examples include Korean won = 5 yang in 1893, Iranian toman 10 rials (used informally today). In the Ottoman Empire, lira and kuruş were super units at some point before becoming the main unit.

Decimal vs. non-decimal

A decimal currency is a currency where the ratio between the main unit and the subunit is an integral power of 10. Non-decimal currencies are now rare but had some advantages in daily life transactions. For example, 1 South German Gulden = 60 Kreuzer. 60 can be divided into 2, 3, 4, 5, 6, 10, 12, 15, 20 or 30 parts that are still integers, making pricing easy. This advantage (in an age without mechanical or electronic calculators) and the lack of widespread accurate weighing apparatus (meaning an item might sometimes simply be divided in 2,4,6 etc.) coupled with tradition were the reasons why non-decimal currencies were used.

In theory, two countries currently use non-decimal currency: Mauritania (1 ouguiya = 5 khoums) and Madagascar (1 ariary = 5 iraimbilanja). In practice, however, the value of the main unit in each case is so low (less than 1/1000 of a United States dollar) that the sub-unit is not of any practical use and is rarely seen in circulation. In the case of the iraimbilanja, this is a carryover of the Madagascar's previous currency, the Malagasy franc, which had the ariary as a super unit worth 5 francs, and iraimbilanja was an alternate term for the franc. The last major countries to use non-decimal currencies in practice were the United Kingdom (until 1971), Ireland (1971), Malta (1972) and Nigeria (1973).

Choice of name

It is common to name a unit with a unit of weight, such as pound, lira, and baht. In most cases, these currencies were originally defined as that amount of some precious metal. Another choice of name is some form of derivative of the political entity. The Afghan afghani and European euro fall into this category. Sometimes the name is simply the name of the metal, of which the coins are made, such as Polish złoty and Vietnamese đồng.

References

  1. ^ A law of the abolition of currencies in a small denomination and rounding off a fraction, July 15, 1953 Law No.60 (小額通貨の整理及び支払金の端数計算に関する法律 Shōgakutsūka no seiri oyobi shiharaikin no hasūkeisan ni kansuru hōritsu?))

See also


Wikimedia Foundation. 2010.

Игры ⚽ Поможем сделать НИР

Look at other dictionaries:

  • Denomination — may refer to: Religious denomination, such as a: Christian denomination Jewish denomination Islamic denomination Hindu denominations Buddhist denomination Denominationalism, the division of one religion into separate groups, sects, schools of… …   Wikipedia

  • Currency packaging — includes several forms of packing money for easy handling and counting. Many systems use standard color coding or are marked to indicate the amount in the package. Contents 1 Currency straps 2 Coin bags 3 Coin wrappers 4 …   Wikipedia

  • Denomination — von lat. denominatio: (nähere) Benennung, Bezeichnung hat eine Reihe unterschiedlicher Bedeutungen: Religion: (insbesondere) im Christentum etwa so viel wie Konfession; siehe Denomination (Religion). Währungswesen: In der Übergangsphase vom 1.… …   Deutsch Wikipedia

  • Currency of Uruguay — This is an outline of Uruguay s monetary history. For the present currency of Uruguay, see Uruguayan peso. Contents 1 Pre independence currency 2 1828–1854 Peso 2.1 History 2.2 Paper …   Wikipedia

  • Currency of Spanish America — This article provides an outline of the currency of Spanish America (las Indias, the Indies) from Spanish colonization in the 15th century until Spanish American independencies in the 19th. This great realm was divided into the Viceroyalty of New …   Wikipedia

  • Denomination (postage stamp) — A Romanian stamp from 1947 showing a denomination of 12 Lei. :This article deals with the price of a postage stamp. For other meanings of the word denomination see Denomination (disambiguation). In philately, the denomination is the inscribed… …   Wikipedia

  • Currency of Venezuela — This article provides a historical summary of the currency used in Venezuela since the end of the 18th century. For the present currency of Venezuela, see Venezuelan bolívar. Contents 1 Pre independence currency 1.1 Coin 1.1.1 1787 lightweight… …   Wikipedia

  • Currency strap — A stack of $10,000 straps. Note the ABA compliant mustard color. A currency strap, also known as currency band or bill strap is a simple paper device designed to hold a specific denomination and number of banknotes. It can also refer to the… …   Wikipedia

  • Denomination — A classification for the stated or face value of financial instruments, including currency notes and coins, as well as bonds and other fixed income investments. Denomination may also refer to the base currency in a transaction, or the currency in …   Investment dictionary

  • Currency of Colombia — Contents 1 Spanish colonial coinage 1.1 1622–1756 Cob coinage (macuquina) 1.2 1756–1822 Milled coinage 1.3 1813–1820 Necessity coinage …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”